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Arizona sales-tax initiative is a mess

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The Arizona Republic

Sunday, July 8, 2012

Robert Robb

From the political notebook:

I don't know whether the courts will allow the initiative enacting a permanent 1 percent sales tax and divvying up the spoils between educators and contractors to make it to the ballot. But in addition to the procedural screw-up, the initiative is a drafting mess. It deserves to be tossed from the ballot for incompetence.

The procedural screw-up, however, is what will first be before a court. Before an initiative is circulated, state law requires filling out a form provided by the Secretary of State's Office, including a copy of the initiative.

The sales-tax advocates gave the Secretary of State's Office two versions of the initiative, one a hard paper copy, one an electronic version.

They differ substantially. Under the electronic version, universities and road construction get hundreds of millions of dollars more. Under the paper version, K-12 education gets hundreds of millions of dollars more.

There is little question that the paper version is the official version filed under state law. The form that the Secretary of State's Office provides for initiative applications, which includes the initiatives' text, can only be filed on paper.

While there is the opportunity to make some election-related filings electronically, state law doesn't provide for it in this case. It's a paper filing, as every other initiative campaign got right.

The sales-tax advocates, however, circulated the electronic version.

After the discrepancy was pointed out by the vigilant tax wonks at the Arizona Tax Research Association, Secretary of State Ken Bennett rejected the signatures filed for the electronic version. Given state law and historical customs and practices, he really had no choice.

The sales-tax advocates have sued, asking the courts to put the initiative on the ballot, presumably the electronic one. According to them, filing or circulating the wrong initiative amounts to just a clerical error.

The courts have held that initiatives don't have to strictly comply with state petition-circulating requirements as long as they substantially comply. The requirement that a copy of the initiative be filed with the secretary of state before circulating, however, hardly seems like a small, technical matter.

To find that sales-tax advocates have substantially complied with initiative requirements, a judge would have to: read into state statutes a right to file an electronic copy that doesn't exist; conclude that it doesn't matter if what is circulated differs from what was filed; or opine that hundreds of millions of dollars in difference to intended beneficiaries isn't material.